Awesome chart, from Dan Edstrom via Zero Hedge:


click for ginormous graphic

Category: Credit, Digital Media

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

19 Responses to “Reverse Engineered Securitization Flow Chart”

  1. wally says:

    Not like the old days when I could go down and see Dennis at the Farmer’s bank, get a mortgage in a couple of days and send him the monthly check for years after that.

  2. obsvr-1 says:

    WOW !! Now that is some magical fricken financial innovation …. ooops the smart ass MBAs and greedy banksters ignored (deemed it an acceptable risk to violate) the law and now they want us (those who live by equal protection and justice) to forget the prosecution.

    The paper trail of fraud is so thick they can’t seem to see the forest for the trees …

  3. obsvr-1 says:

    oh I forgot, how many lawyers (liars) do you think it took to create this beast … they should not be let off the hook for prosecution and jail time. The environment of heads we win, tails we win for the lawyers needs to be reformed in a big way.

  4. obsvr-1 says:

    Seriously, Jail the Bankers or This Economy Will Never Fully Recover

    By refusing to hold the corporate criminals at the heart of the housing crisis accountable for their crimes, we’re creating powerful incentives for future malfeasance.

  5. mbelardes says:

    Oh man, BR, please tell me you have seen this explanation of QE. So accurate and yet so hilarious at the same time…

  6. rustum says:

    Those characters in that video are very funny. So many videos are created using them.

  7. constantnormal says:

    Loved the zerohedge piece. Now I’m just waiting for the holiday commercial, the one that goes

    “What do you get for that special friend with all the money, who can buy himself anything he wants? How to show your appreciation for all the support and campaign contributions? This Christmas, think GOLD, in the form of the Medal of Freedom — for the times when you need gifts that money just can’t buy …”

    Every president wraps himself in an impenetrable bubble of yes-men, disconnecting themselves from Reality and relying only on their internal balance.

    Lincoln said it best, regarding the nature of one’s fundamental character:

    Nearly all men can stand adversity, but if you want to test a man’s character, give him power.

  8. Gibbon says:

    The idea that slavery no longer exists in the United States is absurd. The bondage has simply changed from chains to loans and contracts. More labor can be extracted by the latter form and they have to feed, clothe and shelter themselves as well.

  9. ottnott says:

    Ah, a paragon of the private-sector financial innovation that makes America great and should be protected from the government regulators out to destroy the economy and enslave…wait a minute. Isn’t that the chart the GOP used to show that the Healthcare Reform plan was hopelessly complicated and inefficient?

  10. FrancoisT says:

    In finance, complexity breeds fraud.

  11. victor says:

    To marklhessel :

    Interesting, Americans were buying houses in the middle of WW II when much of the world was in flames! What a country! No wonder”everybody wants to live in America”, still valid today. Any idea how much the down payment was? I assume the “taxes”are property taxes? The $1 amount would be some sort of PMI or what? Per historical stat’s in 1942 an average new house cost was some $4000 and the average income $1800/yr. I wonder what the owners’ income was? just asking, thanks

  12. [...] – Securitisation, reverse-engineered. [...]

  13. AHodge says:

    Teri lost her job
    Dan and Terry still have income, but need a lower payment modification.
    lets light this model up and run through how that works?

  14. [...] the borrowers and the property.  Today I came across this diagram that showed up on Zero Hedge and The Big Picture.  In both spots, the diagram is described as showing how a mortgage is securitized meaning how it [...]

  15. gordo365 says:

    MarkHessel – thanks for posting that mortgage note from 1942.

    Per Zillow – that $42k house mortgage is for a house now worth $350k. Brilliant investment right?

    Did the value of the house go up 700% or did the value of the dollar go down 88%?

  16. marklhessel says:

    victor and gordo365:

    I saw this on reddit. Here’s a link with comments.

    The jpg is just the note. There had to be more paperwork involved. Honestly, current notes are not
    much more complicated. I thought it was an interesting tidbit.